| Supply side structural reform the mainline of economic policy of China 13th Five Year Plan,which is the major economic development strategy to adapt,grasp and lead the "New Normal".Supply side structural reform requires the strengthening of the service industry development and raising the proportion of service industry in the three industries,requires labor factor transfering from manufacturing industry to service industry,requires giving fullplay to service industy’s ability to absorb labor force.But now there exists some difficulties in the measurement of service industry’s ability.This paper proposes the potential supply scale of service industry,which is the potential optimal output given fixed capital investment,to measure the development space of the service industry,and analyze the internal structure of service industry by the ratio of potential supply scales of products ice and consumer service.On this basis,this paper analysis the rule and factors of labor allocation between industries,proposes hypothesis under verification in theory,and develop the empirical model.The measure of core variable is one of the focus of this paper.This paper adopts the cost function method to estimate the potential supply scales of service industry,producer service sector and consumer service sector of 30 provinces of China in 2002-2014.The results state that although the national potential supply scale of service industry expands continuously,it increases by from RMB 3730.132 billion to 17964.257 billion during 13 years with 12.85%average growth rate per annum.But there exists obvious differences in the growth rate among the provinces.For most of provinces,the potential supply scale of service industry of 2014 is 3 to 6 times than that of 2002.Furthermore the potential supply scale of service appears contraction in several provinces unusually.For example,from 2012 to 2014,the potential supply scale of Shanghai service remarkably decreases from RMB 653.827 billion to 545.796 billion,Jiangxi,Henan,Beijing and Gansu rises first and falls later.In aspect of empirical model,this paper regards the rate of the number of employees between service and industry and between service and heavy industry as the explained variable;regards the potential supply scale of service,producer service and consumer service as the core explanatory variable to measure the absolute development space.The other core explanatory variable is the labor quality.Adding control variables one by one controls the difference among provinces in the aspects of service contribution level,economic extroversion,factor endowment,marketization degree,government size and regional difference.By adopting the mixed effect and random effect of static panel to do positive analysis,the result verifies the hypothesis.The improvement of the potential supply scale of service,producer service and consumer service will enhance the rate of labor allocation between service and manufacturing industry,and the rate between service and heavy industry.The rate of employees between service and manufacturing industry suffers an increase of 0.10%-0.37%,and the rate of employees between service and heavy industry suffers an increase of 0.08%-0.27%,for each percentage-point increase in the potential supply scale of service.This fully shows that the improvement of the potential supply scale of service will exert a positive effect on the transform of labor from manufacturing industry to service industry.In the aspect of policy suggestion,this paper proposes three directions at the basic of empirical analysis,which is leading the direction of investment of social capital,enhancing the quality of investment in producer service and proposing differentiated policy path for three types of provinces depending on the "relative space".All of these suggestions will effectively push the labor factors transfer from excess capacity-manufacturing industry to service industry and optimize labor allocation. |